What defines Ad Valorem Taxes?

Ad Valorem Taxes are best defined as real property taxes that vary with the value of the property. This means that the tax amount is directly proportional to the assessed value of the property. Essentially, the higher the property value, the higher the ad valorem tax burden. This system allows for a fair assessment of property taxes, taking into account the current market value of real estate, which can fluctuate due to various factors such as neighborhood changes, market conditions, and improvements made to the property.

In contrast to fixed taxes that do not change based on property value, ad valorem taxes adjust according to the property's worth. Similarly, ad valorem taxes are not related to property sales but are focused solely on the assessed value of the property itself. Additionally, not all ad valorem taxes are prorated, as this is a specific circumstance that might apply in certain contexts, but it is not a characteristic that defines these taxes in general.